This is a clever tool I built that will calculate the required cash owed at the end of any period based on defined initial investments, investments over time, distributions over time, and a desired IRR target. The spreadsheet runs natively in Google Sheets and can be downloaded to Excel with on problem if so desired. I include the IRR financial metric in all startup financial models that you will find here on SmartHelping.
$45.00 USD
The IRR is typically used in capital budgeting to evaluate the potential return on an investment. It is a measure of the investment's profitability and the rate at which an investment is expected to generate returns. To calculate the IRR, you need to determine the investment's initial cost, the cash flows it is expected to generate over time, and the appropriate discount rate to use to determine the present value of those cash flows.
Once you have these values, you can use the IRR formula to calculate the expected rate of return on the investment. This information can then be used to compare the investment's expected return with the returns available from other investments, and to determine whether the investment is worth pursuing.
For example, if you are considering investing in a new factory, you might use the IRR to compare the expected return on that investment with the returns available from other potential investments, such as stocks or bonds. This will help you to decide whether the factory investment is the best option for your investment portfolio.
In general, the higher an investment's IRR, the more attractive it is as an investment opportunity. A high IRR indicates that the investment is expected to generate strong returns, and it may be a good option for investors who are looking to maximize their returns.
Once you have these values, you can use the IRR formula to calculate the expected rate of return on the investment. This information can then be used to compare the investment's expected return with the returns available from other investments, and to determine whether the investment is worth pursuing.
For example, if you are considering investing in a new factory, you might use the IRR to compare the expected return on that investment with the returns available from other potential investments, such as stocks or bonds. This will help you to decide whether the factory investment is the best option for your investment portfolio.
In general, the higher an investment's IRR, the more attractive it is as an investment opportunity. A high IRR indicates that the investment is expected to generate strong returns, and it may be a good option for investors who are looking to maximize their returns.
With this template, you will be able to define your desired IRR and the cash flow calculator will spit out the required distribution that is needed to meet that target at a defined end year.
More Valuation Templates:
- Preferred Return - Multiple GP Catch-up Options
- Exit Readiness Scorecard Model
- LBO Model with T12
- General Leveraged Buyout Model (LBO) (upgraded version added)
- Small Business Valuation Sensitivity
- Business Valuation Using EBITDA Multiple
- WACC Calculator
- DCF Analysis (monthly)
- DCF Analysis with Sensitivity Tables and IRR
- Gordon Growth Model
- Interest Rate Swap
